Li3 believes that, if production of hybrid vehicles increases and transitions to pure electric vehicles over the next decade, then global requirements for lithium used in the production of batteries may increase substantially. Numerous Fortune 500 companies, along with battery and auto makers in Korea and Japan have responded and partnered with lithium exploration companies in an effort to ensure a consistent, steady and reliable source of their own lithium.
The government of the Republic of South Korea, one of the world's leading lithium battery producing nations has mandated to invest $12.5 billion over the next ten years in lithium resource projects and deemed lithium a "strategic commodity". The most dramatic increase in demand is being spurred by auto makers racing to bring lithium-ion battery powered and hybrid electric cars to market. Industry estimates suggest that annual demand for lithium has increased from 100 tons in the beginning of the 20th century to approximately 23,000 tons of lithium carbonate equivalent (LCE) today.
The primary factor that is driving the overall demand for lithium is lithium-ion battery production, which over a four year period has risen by more than 65% to approximately 5,800 tons of LCE in 2008, representing 25% of overall demand (a 19% increase from 2004). According to the USGS, lithium demand for ion-battery usage is forecast to grow 20% per annum, while overall demand is expected to grow 4-5% every year.